TELECOMMUNICATIONS : House Leaders Move on Telecom Reform : Congress: Vote is near on package ending government role in policing competition.

Rejecting efforts by long-distance carriers and others to maintain a substantial government role in policing phone competition, the House Republican leadership is moving to finalize a telecommunications reform bill, with a vote likely before the August recess.

House Speaker Newt Gingrich (R-Ga.) and Commerce Committee Chairman Thomas Bliley Jr. (R-Va.) on Monday appeared to be closing ranks behind a telecommunications package seen as more favorable to the regional Bell operating companies than the bills passed several weeks ago by the House Commerce and Judiciary committees.

The shift came after Judiciary Committee Chairman Henry Hyde (R-Ill.) last week abandoned his quest to seek an oversight role for the Justice Department to closely monitor local phone competition. Now he and Bliley are discussing a possible consultative role for the department.

“Destiny was not calling for it,” Hyde said, describing the tepid response to a Judiciary Committee bill that would have let the Justice Department review local phone competition before approving regional Bell operating company entry into the long-distance market.

Hyde’s concession was the second big defeat in the past few weeks for the long-distance industry.

AT&T;, MCI Communications Inc. and several hundred smaller long-distance providers have found themselves on the legislative ropes despite a deep-pocket team of all-star lobbyists, including former Republican Sen. Howard Baker, former George Bush Administration official Marlin Fitzwater and Vin Weber, a former Republican congressman who is a close friend of Gingrich.

Initially, the big-name political guns seemed to be hitting their targets: The long-distance industry was assured throughout the spring by House leaders that telephone competition provisions favored by the industry would remain in the bill despite opposition from the seven powerful regional Bell companies. Long-distance companies even supported a Senate bill they didn’t like because they were confident of getting their way in the House.

But only days after AT&T; launched an advertising campaign earlier this month urging voters and lawmakers to support the House measure, long-distance officials were told in Capitol Hill meetings that the favorable language would be axed.

“Certainly we expected this Congress would have had the will to take on the entrenched monopoly; it appears we were wrong,” said Gerald M. Lowrie, senior vice president of government affairs for AT&T.; “Somewhere along the road this [bill] went out of balance.”

The skirmishes over long-distance competition aren’t the only controversial matters that threaten the House bill. The provisions are part of a sweeping measure that touches on everything from cable TV rates to allowing broadcasters to buy more radio and television properties.

Scores of legislators are gearing up to put their imprint on it at the eleventh hour, with lively debates also likely on measures to curb sex and violence in cyberspace and over the airwaves.

Political experts say it may still be too early to write off the long-distance industry or any other interest group vying to change the ground rules of the Information Age. But even long-distance officials admit they have been outmatched by the massive Bell lobbying campaign.

“Clearly the Bells have ubiquity,” said AT&T;’s Lowrie. “They are everywhere in every community, with deep pockets and fervent views on the issues.”

Bliley and Gingrich have told long-distance executives that they favor changing several key ground rules for local phone competition. The lawmakers want to drop language that stipulates that a Bell company face local phone service competition “comparable in price, features and scope” before it can get into the lucrative long-distance business.

Gingrich and Bliley have also reportedly proposed shortening from 18 to six months the time Bell companies must wait to apply for entry into the long-distance market. They would also allow local phone companies to determine local phone resale rates--a freedom that critics say would make it more difficult for rivals to provide service at economically feasible rates.

Despite the extensive changes, Pacific Bell spokesman Robert Stewart on Monday insisted the bill was not tilted in favor of the Baby Bells.

“The Bells, frankly, have had to swallow very hard on some of the provisions in this legislation,” Stewart said. “I guess the long-distance industry would be happy with the status quo--no legislation at all.”

It’s unlikely, however, that long-distance companies will be able to kill legislation after having invested so much effort supporting it. What’s more, some companies such as AT&T; and MCI have made acquisitions or strategic alliances with other telecommunications companies in the past 18 months in anticipation that telecom reform would pass in some form.